Remember when it seemed like businesses closing for April seemed like the end of the world? Now days, you might just be excited that the prospect of keeping your doors open. Such is the feeling of business chaos these days.
JobKeeper has done its job at bridging a business chaos gap for many Aussie businesses, but with it tapering down after September, and for some businesses coming to an end (if your GST turnover is down less than 30% for the September quarter), it’s time to start thinking about life without that support.
Evaluating the new business landscape can be daunting. In a recent poll, 10% of businesses indicated that if support was no longer available from the government, they expected to close for good. Women-owned businesses have been disproportionately hit, with nail parlours, hairdressers and beauticians experiencing serious financial difficulty if not closing altogether.
But you already know this, you’ve been living it. Watching your hard work and planning get shafted by circumstance has likely had you feeling a bit out of control, to say the least. That’s fair, there’s been so much outside of your control, but there are still things you can do.
Circles of control
You might have heard of a theory called circles of control. Basically, it breaks down the events of your life into three categories;
- things you can control,
- things you can influence and
- things that are entirely out of your purview.
COVID-19, and the various governments’ reactions are certainly outside of your control – and let’s face it have caused a good deal of business chaos. But losing sleep wondering what you could have done differently won’t make much of a difference. So put that in the outermost circle. Then there are things you can influence, that would be your business partners/staff and clients. You can use your communication skills and business acumen to maintain your relationships and help them with their issues as much as possible but ultimately, you can’t control their financial circumstances or the choices they will make. Which leaves us with the centre circle, what you can control. This is where most of your energy and planning should be centred.
So, what can you control when surrounded by business chaos?
You can control how you react and what steps you take both in business and personally. We’ve talked about it before, but now is the time to plan, plan and replan. Now more than ever it’s important to know where your money comes from (and when it’s coming!) – that’s the art of cashflow management and it will help you avoid feeling stuck in the land of business chaos.
Keep in contact with anyone you’re relying on, don’t wait until the day before you need payment to double-check your client is in a position to pay you.
To that end, be understanding where you can. Better to keep your business running than alienating your clientele. Extending some goodwill might just be the key to ensuring your business relationships not only survive this pandemic but in fact, come out stronger. That having been said, you also need to make sure that you’re managing your cashflow so that you can pay your own bills.
Ask for help (from the right people)
Let’s be honest, you most likely spent the first few months of COVID nervously looking around at your peers in the business world to see what they were doing and how they were coping and sharing what useful knowledge you could. That was a good move, it’s called community building and it’s the silver lining to any great catastrophe. Nothing binds people together like shared uncertainty and the relationships you built over this time will likely prove to be some of the most enduring.
That said, we are moving into new territory, and as emotionally helpful as it has been to have, in many cases, a virtual shoulder to lean on, as we all navigate our way forward (and hopefully out of pandemic into the new normal), now is the time to talk to an expert. Reach out to your qualified financial advisor and ask for help making a plan for your new financial future. It might be preparing cashflow forecasting, looking at consolidation for future growth or winding back a bit or winding down.
Make hard decisions to prevent future business chaos
Making cuts is never easy. Whether you’re looking at scaling back some of your growth plans or letting go of good employees, deciding to put the health of your business first can feel like you put the brakes on too fast – everything jerks to a stop and frankly, you can feel sick in the gut.
Of course this isn’t what you wanted for 2020, but if you want there to be a 2021 for your business, now is the time to consider those difficult choices – lest time makes them for you. Ignoring dwindling cash flow until you can’t pay people, doesn’t do anyone any favours. And that’s especially true if you’ve got a company that’s heading towards insolvent trading.
Think realistically about what will really bounce back in time for your business to function. In the same way, think about what you’ll do with any new innovations that have helped keep cash flowing. And decide what you’ll do with those things that in alternative 2020 universe were great ideas, ripe with potential, but which are now stagnant or worse, a money drain.
In April, it was probably reasonable to think most things would ‘bounce back’ in September. However, maybe it’s now time to take the harder route and live to fight another day.
And that’s where we can help. If you’d like help planning your business recovery, we’d be delighted to talk. You can call us on 02 6023 1700 or drop us a note via the form below.
Got a question? Get in touch
If you've got financial or business questions, or you just want to run something by us, we'd be delighted to really talk to you – in person, over the phone - call us on 02 6023 1700 - or you can use the form below and we'll get back to you.